A New Jersey-based company has agreed to pay more than $11.3 million to settle False Claims Act allegations arising from fraudulently reported call center performance metrics and fraudulent claims to the South Carolina Department of Health and Human Services.
Conduent State Healthcare has been operating the South Carolina Medicaid Member Contact Center since 2016, according to an Oct. 3 Justice Department news release. The company's contract is performance-based and uses a tiered payment structure. Conduent receives higher payments as completed call center contracts increase and receives penalties if certain metrics are not met.
Between Jan. 1, 2018, and Feb. 28, 2023, two former Conduent employees supplied fake reports with inflated call volumes and misrepresented metrics to avoid penalties under the contract, according to the release. The South Carolina Department of Health and Human Services paid Conduent more than $8.1 million as a result of these false reports.
In June 2023, Conduent self-disclosed the conduct to the Justice Department. The company took remedial measures, including disclosing the problem to the South Carolina Department of Health and Human Services within days of discovering the conduct, suspending monthly invoices until a loss amount was determined, immediately terminating the two employees, and returning the money fraudulently received, among other things.
The two employees — Richard Kirchner, 71, of Branchburg, N.J., and Brian Devanney, 66, of Lexington, S.C. — pleaded guilty to their roles and are awaiting sentencing, according to the release.
Damages and penalties against Conduent could have resulted in a judgment of more than $26 million, but given the company's voluntary disclosure and remedial actions, the case was resolved for $11.3 million, according to the release.